TY - JOUR
T1 - Lean against the wind
T2 - The effect of policy uncertainty on a firm's corporate social responsibility strategy
AU - Peng, Daoju
AU - Colak, Gonul
AU - Shen, Jianfu
N1 - Funding Information:
Daoju Peng acknowledges the financial support from Natural Science Foundation of China (number: 71603172 ). Jianfu Shen acknowledges the financial support from a start-up research grant (number: P0030199 ) and a RGC direct allocation grant (number: P0038209 ) from The Hong Kong Polytechnic University . Gonul Colak acknowledges the financial support from the Czech Science Foundation (grant number: 22-19617S ), Czech Republic. We thank Zhengyi Zhang for help with data.
PY - 2023/2/3
Y1 - 2023/2/3
N2 - We examine the effect of policy uncertainty on firms' strategy of corporate social responsibility (CSR). During uncertain times, firms strategically increase their commitment to CSR causes. Policy uncertainty is positively associated with CSR performance regardless of the estimation method. CSR strategy can substitute for lobbying when firms attempt to manage policy uncertainty. Improved CSR performance can reduce firms' exposure to policy uncertainty which indicates that CSR commitment can deliver insurance-like benefits. The findings highlight the value of CSR commitments during uncertain times.
AB - We examine the effect of policy uncertainty on firms' strategy of corporate social responsibility (CSR). During uncertain times, firms strategically increase their commitment to CSR causes. Policy uncertainty is positively associated with CSR performance regardless of the estimation method. CSR strategy can substitute for lobbying when firms attempt to manage policy uncertainty. Improved CSR performance can reduce firms' exposure to policy uncertainty which indicates that CSR commitment can deliver insurance-like benefits. The findings highlight the value of CSR commitments during uncertain times.
KW - 512 Business and Management
KW - corporate social responsibility (CSR)
KW - policy uncertainty
KW - hedging strategy
KW - gubernatorial elections
UR - http://www.scopus.com/inward/record.url?scp=85147689141&partnerID=8YFLogxK
U2 - 10.1016/j.jcorpfin.2023.102376
DO - 10.1016/j.jcorpfin.2023.102376
M3 - Article
SN - 0929-1199
VL - 79
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
M1 - 102376
ER -